Australian shares tumbled on Wednesday as materials stocks suffered due to slumping commodities prices while financial counters hit a one-week low. Australia's metals and mining index fell as much as 2.5 percent to its lowest in over a month as Chinese steel futures slipped on Tuesday after a four-day rise.

Australian shares tumbled on Wednesday as materials stocks suffered due to slumping commodities prices while financial counters hit a one-week low. The S&P/ASX 200 index was down 1.4 percent, or 77.55 points, to 5,679.70 at 0329 GMT. The benchmark on Tuesday ended 0.8 percent lower. Australia’s metals and mining index fell as much as 2.5 percent to its lowest in over a month as Chinese steel futures slipped on Tuesday after a four-day rise. Pushing down the futures was of slower demand in the world’s top steel consumer as rains affected construction activity in many parts of the country.

Raw material iron ore was under pressure on the weaker steel prices. Most-traded iron ore on the Dalian Commodity Exchange eased 0.7 percent to 430.50 yuan a tonne on Tuesday. Miner Rio Tinto declined as much as 3 percent to its lowest in more than a month, extending losses into a seventh straight session. BHP Billiton hit a seven-month low after falling as much as 3.7 percent. Financials stocks also dragged the index lower, with the “Big Four” banks losing between 1.3 percent and 2.4 percent.

“Often in the Australian market, index related selling puts pressure on banks,” said Ric Spooner, chief market strategist at CMC Markets in Sydney. “So if we do have people, for example international investors, lessening their exposure to the Australian markets because of weaker commodity prices, then sometimes it involves selling mixed stocks generally including banks to reduce overall country exposure,” Spooner added.

Gold stocks also suffered losses after the metal hit a five-week low on Tuesday. Newcrest Mining Ltd shed 1.5 percent to touch its lowest in nearly a month. Energy stocks were hurt by a 2 percent fall in oil prices on Tuesday, as a result of increased supply from several key producers overshadowing high compliance by OPEC and non-OPEC oil producers with a deal to cut global output.

Woodside Petroleum Ltd shed as much as 2.9 percent, hitting a seven-month low and Origin Energy Ltd dropped to a near three-month low.

New Zealand’s benchmark S&P/NZX 50 index, which slipped 0.1 percent on Tuesday, dropped 0.5 percent, or 39.32 points, to 7,547.21. Losses in healthcare and materials stocks dragged the index down. Fisher & Paykel Healthcare Corporation Ltd lost 1.5 percent and Fletcher Building Ltd 2.1 percent. The Reserve Bank of New Zealand (RBNZ) is widely expected to keep its cash rate at a record-low 1.75 percent at a meeting Thursday, a Reuters poll showed.